Fitness companies flounder in IPO market after a flood of deals
Has the U.S. IPO market reached peak fitness?
It may have, based on Thursday’s market, which saw the latest fitness company to go public — Life Time Group Holdings — flounder in early trade, while another expected this week, iFit Health & Fitness, postponed its deal, citing adverse market conditions.
Life Time Group LTH, a Minnesota-based fitness chain backed by private-equity firm Leonard Green & Partners, saw its deal price at $18 a share, which was at the low end of its proposed range. The company raised $702.0 million as it sold 39.0 million shares. The stock’s first trade was at $16.57 at 10:42 a.m. Eastern for 1.8 million shares. At that price, the company was valued at $3.28 billion. The stock is trading on the New York Stock Exchange, under the ticker “LTH.”
IFit, which offers large fitness equipment in the US, under brands including iFIT, NordicTrack, ProForm, and Freemotion, was seeking to raise up to $647 million at a valuation of $6.7 billion. The company “will continue to evaluate the timing for the proposed offering,” it said in a statement.
For investors, the moves may not come as a surprise given the veritable flood of companies in the fitness space to hit public markets this year, all seeking to take advantage of the buzz around “wellness.”
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In July, the market absorbed the IPOs of F45 Training
FXLV,
and Xponential Fitness
XPOF,
F45, a fitness studio franchisor backed by actor, producer and fitness fan Mark Walhberg, raised $325 million at a valuation of $1.5 billion. Xponential, a boutique fitness brand franchisor and owner of brands including CycleBar and Pure Barre, raised $120 million.
Those came after the February three-way merger between Beachbody, MYX Fitness, a Peloton Interactive Inc.
PTON,
rival, and a special-purpose acquisition corporation, or SPAC, called Forest Road Acquisition Corp., in a deal valued at $2.9 billion.
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Other deals in the pipeline include Echelon Fitness, another maker of stationary bikes and Peloton rival, that is reported to be seeking private funding or an IPO, and Hydrow, a maker of rowing machines that is reportedly either exploring an IPO or a SPAC deal.
Yoga gear maker Lululemon Athletica
LULU,
got in on the action in June with the acquisition of Mirror, an in-home fitness company with an interactive workout platform, for $500 million.
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Most of these companies are loss making and suffered a setback in 2020 at the height of the pandemic, when in person gym attendance was mostly banned. The U.S. fitness club industry lost $20.4 billion in 2020, according to…
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